Note 7 – Equity and Stock-Based Compensation

In addition to cash compensation, the Company may compensate certain service providers, including employees, directors, consultants, and other advisors, with equity-based compensation in the form of stock options, stock awards and restricted stock awards. The Company recognizes all equity-based compensation as stock-based compensation expense based on the fair value of the compensation measured at the grant date. For stock options, fair value is calculated at the date of grant using the Black-Scholes-Merton option pricing model. For stock awards, fair value is the closing stock price for the Company’s common stock on the grant date. The expense is recognized over the vesting period of the grant. For the periods presented, all stock-based compensation expense was classified as a component within selling, general and administrative expense in the Company’s consolidated statements of operations.

During the three and nine months ended September 30, 2025, no stock options or common stock were awarded. During the three months ended September 30, 2026, no stock options or common stock were awarded. During the nine months ended September 30, 2026, common stock awards were granted to employees of 8,235 shares totaling approximately $94,000 in stock-based expense.

Equity Incentive Plan

Our 2026 Equity Incentive Plan (the “2026 Plan”) provide for the issuance of stock-based awards to employees, officers, directors and consultants. The Plan permits the granting of stock awards and stock options. The vesting of stock-based awards is generally subject to the passage of time and continued employment through the vesting period. In April 2025, our shareholders ratified our 2026 Equity Incentive Plan (the “2026 Plan”), which provides for the issuance of a maximum of 500,000 shares of our common stock.

Stock Option Activity

Stock option activity under our Equity Incentive Plans is summarized as follows:

 Schedule of Stock Option Activity

The aggregate intrinsic value represents the total pre-tax intrinsic value (the aggregate difference between the closing price of our common stock on September 30, 2026 and the exercise price for the in-the-money options) that would have been received by the option holders if all the in-the-money options had been exercised on September 30, 2026.